IBM: You Won’t Recognize the Ad Industry in 2012

IBM has issued a report that crystallizes and formalizes through survey research what many of us have understood intuitively. It’s called “The end of advertising as we know it.” Duncan Riley pointed it out on TechCrunch late last week, and I’ve just finished reading both the report (get the PDFs of the Executive Summary and the full reporthere) and the accompanying press release. As the release says:

Traditional advertising players risk major revenue declines as budgets shift rapidly to new, interactive formats, which are expected to grow at nearly five times that of traditional advertising. To survive in this new reality, broadcasters must change their mass audience mind-set to cater to niche consumer segments, and distributors need to deliver targeted, interactive advertising for a range of multimedia devices. Advertising agencies must experiment creatively, become brokers of consumer insights, and guide allocation of advertising dollars amid exploding choices. All players must adapt to a world where advertising inventory is increasingly bought and sold in open exchanges vs. traditional channels.

In a previous post I wrote about PR measurement and blogging, and how because of their ability to give lots of numbers, social media can be over-valued relative to news editorial coverage. Even though I’m a huge social media supporter, I still believe that for most businesses the value of mainstream media news coverage is currently much greater than that of online “buzz.” Social media have engagement value, too, and businesses should be getting involved. But editorial coverage still has huge value.

I believe technology and social trends are much bigger threats to traditional advertising than they are to public relations. I will get into reasons for that in a future post.

But as the IBM report indicates, these next five years will be tumultuous for everyone who has been involved in the “one to many” mass media industry that has pushed messages at consumers for the last 50 years. IBM sums it up best by saying: “The next 5 years will hold more change for the advertising industry than the previous 50 did.”

The IBM report, and its four scenarios of how drastic these changes will be, is well worth reading and pondering for anyone interested in marketing and advertising. I’m betting that the “Ad Marketplace” scenario will best describe the picture in 2012.